I have a chargeback on my account. What does this mean?
What is a chargeback?
A chargeback occurs when a customer disputes a charge on their credit card. When this happens, the customer’s bank will reverse the charge and credit the funds back to the customer’s account. This money will be taken directly from your ProPay account. A nonrefundable fee will be automatically assessed to your account if a chargeback occurs. Also, if the chargeback causes your ProPay account to go negative, you will be responsible to cover the negative balance.
As the merchant, you are given the opportunity to issue a formal rebuttal to the chargeback. You can do this by providing any documentation that you have that supports the legitimacy of the original transaction. Once that documentation is submitted, the bank will review it and decide whether or not to honor the original transaction. If they decide that the charge is valid, the funds will be returned to your ProPay account. Otherwise, they will remain in your customer’s account.
There are a few steps that can assist in a reduction of chargebacks. Here are a few best practices:
- Ensure your account descriptor correctly reflects your company and is easily identifiable for your customers. (You would have chosen your descriptor when you set up your account. Contact Customer Service if you would like to change your descriptor).
- Ensure your policies are clearly noted on your website, if applicable.
- Provide world class customer service to assist with any customer complaint and be available to answer any questions.
- Ensure that any clerical mistakes are addressed in a timely fashion without causing your customers to have to address it with their financial institution.
- Ensure products/services are as detailed as possible to avoid misrepresentation or false expectations.
- Don’t use the chargeback process in lieu of refunding your customer.
What can you provide to prove that your transaction is valid?
If a chargeback occurs on your account, ProPay’s Resolutions department will contact you with details on how to start the formal rebuttal process. This email will contain a specific list of what you can provide to prove to the bank that your transaction is legitimate. The importance of having the correct documentation in place cannot be stressed enough. Here are a few suggestions of the types of documentation you will want to keep from your sales so you can provide them in case of a chargeback:
- Any signed invoices, contracts, sales slips, card imprints or anything bearing the signature of your customer
- Terms and Conditions, if applicable
- Proof of delivery (signed is always best)
- Any correspondence from the customer regarding the sale or products and/or services
- A brief letter from you outlining the circumstances surrounding the transaction
Once you receive the email from our Resolutions department, you have 14 days to respond with your documentation. We will submit your documentation for the bank to review. The bank has 60 days to review the documentation and get back to us with their decision.